Still not seeing any letup in the recession, Zumiez CEO Rick Brooks said the Everett-based retailer has been working with its vendors to get more low-priced merchandise into stores for back-to-school shopping.
“This is the toughest economic environment I’ve ever worked in,” Brooks said Wednesday during the company’s annual shareholder meeting in Everett.
He said Zumiez has been opening fewer new stores to reflect its diminished sales outlook, though its overall strategy remains the same. The retailer sells clothing, equipment and shoes inspired by board sports.
“We’re staying true to who we are,” he said more than once, noting the company will maintain “strong training programs” for store employees and emphasize products that can’t be found elsewhere at the mall.
Outside vendors will continue to account for about 85 percent of its sales, he said, meaning its own private labels will not take up more space in stores even though they generally are seen as a way to boost profits.
“We’re going to support the brands in our business,” Brooks said. “We believe in the brands out there.”
Zumiez operates about 360 stores aimed at skateboarding and snowboarding enthusiasts in 32 states.
For the three months ended May 2, it lost $1.7 million, compared with a profit of $1.4 million a year ago. It expects another loss for the second quarter.
After opening 58 new stores last year, Zumiez plans 36 new stores this year and has committed to “only a handful” of additional locations next year, Brooks said.
He declined to discuss a possible deal for Active Ride Shop, a 21-store California chain that recently filed for Chapter 11 bankruptcy protection, saying Zumiez is “very early in the due-diligence process.”
Court filings show Zumiez would pay as much as $7.2 million in cash for Active Ride Shop, depending on the number of stores it decided to buy and its valuation of the inventory.
Wednesday, a shareholder asked Brooks when he thought Zumiez might see better economic times.
“We don’t know,” Brooks replied. “Hopefully, this is a once-in-a-generation downturn.”
Amy Martinez: 206-464-2923 or email@example.com